From the AP
WASHINGTON – Urgently shifting course, the Bush administration is abandoning the centerpiece of its massive $700 billion economic rescue plan and exploring new ways to shore up not only banks but credit-card, auto-loan and other huge nonbank businesses. Democrats are pressing hard to include a multibillion-dollar bailout for faltering automakers, too — over administration objections. Unimpressed by any of the talk on Wednesday, Wall Street dove ever lower.
"The facts changed and the situation worsened," Treasury Secretary Henry Paulson said at a news briefing, explaining the administration's switch from its original plan to help financial institutions by buying up troubled assets, primarily securities backed by bad home loans.
How is throwing money at charlie foxtrots beneficial to the economy? As I said about the crap sandwich back on September 29.
Emergency and rushed Bills usually turn out to be real turkeys. That got us the Patriot Act approved by 99 senators. That got us the department of "Homeland Security." That got us a massive increase in government, the loss of our freedoms, and in my opinion did nothing to make us safer.
You can't rush this crap. You have to first try and prevent this. If that doesn't work, as it did not work here, you find the root of the problem. When a Japanese Maple (my dad will get that reference) wraps around a septic pipe and breaks it, you don't fix the pipe until you correct the Maple. Else, it will break again, and the maple roots would be even bigger. This bandaid does nothing to fix the problem. It is so Pelosi, Chris Dodd, GW Bush, Goldman Sachs Paulson, Barney Frank, and Boehner can say "Hey, we did something!" and go back to put their heads in the sand and hope the worse collapse happens when they retire so it isn't their problem.
There's no secret to the problems here. People spent more than they had. They screwed up. The banks also screwed up in lending. Fixed costs they did not budget for increased. Housing markets dropped. Jobs (in Michigan and some other places) were scarce. Energy prices increased dramaticly. Unless these are addressed, then this bailout will only make it worse down the road.
My plan would be this.
1. All of the above (Except ethanol which raises food costs) energy policy. We need to open up our domestic energy sources, creating jobs here and improving our national security at the same time. Drill in Alaska and offshore. Clean Coal electricity. Nuclear Power. And at the same time work for alternative fuel. Fuel Cell, cold fusion. This needs to be long term. As people spend less on energy costs, they have more money in their pocket. Demand will only increase with an industrializing China and India and their 2+ Billion people.
2. Reform Fannie Mae and Freddie Mac. This should have been done 5 years ago.
3. Cut pork spending.
4. As far as the Wall Street plan, the Republican Study Committee has an alternative plan which I can support. Click here to see Pence and Jeb Hensarling's plan
Paulson put all his eggs in one basket, as did Pelosi, Boehner, Dodd, Frank, Bush, etc. The rank and file house democrats and republicans alike united against this crap sandwich. It's time to think things through, quit rushing, and deliver something that isn't a crap sandwich.
I hope Obama's first act as president is to fire Henry Paulson, and then replace him with someone better.